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BrianWCarver writes "IP Law & Business shines the spotlight on Intellectual Ventures, the IP start-up founded in 2000 by former Microsoft chief technologist Nathan Myhrvold. According to some estimates, Intellectual Ventures has amassed 3,000-5,000 patents, with the help of a $400 million investment from some of the biggest technology companies, including Nokia, Intel, Apple, Sony, and Microsoft. As the patent stockpile grows, so does the speculation--and the fear. IP lawyers and tech executives worry that Intellectual Ventures is less interested in changing the world with big ideas, and more focused on becoming an über patent troll, wreaking litigation havoc across industries with its patents."

The term "patent trolling" is just name-calling. Patents are supposed to be used by the people who invent things to get money from the people who use those inventions to make products. There is no reason to expect people only to invent things that they themselves are capable of bringing to market, and to impose that expectation would reduce the ideas being published in patents and give no incentive to invent or to disclose.

Focus instead on the real problems with the current parent system:

-companies and their engineers are discouraged from using or even looking at existing 3rd party patents due to a stupid interpretation of the willful infringement rule

-it is too expensive to apply for patents, especially for individuals

-it is far too expensive and time-consuming to get legitimate judgements against infringers

-obvious or prior-art patents are routinely granted, and the examiners' incentives encourage this

-patents are often issued that either do not work or do not fully and comprehensibly disclose how to implement the invention

-there is no automatic licensing scheme (as for public playing of music) or overall royalty % cap to asuage the fears of companies that they'll get nibbled to death by various IP holders for acknowledging all the patented technology that goes into making a state-of-the-art product.

This is why patent-trolling is not just name-calling. Many companies (and here it seems we have the epitome) have, as their business model, making-it-impossible-for-others-to-do-their-work-w ithout-paying-us-a-fee.

Patents are supposed to be about collecting-a-fee-for-helping-others-do-their-work- better. In particular: helping them do it better in a way they might never have imagined.

In particular: helping them do it better in a way they might never have imagined.

And now "imagining" means "purchasing". In no way, shape, or form should patents be assignable to a third party. The potential for abuse has already been realized in the courts again and again.

Just look at the name of the company. They were set up, specifically to be a patent troll. Obviously the companies in question figure half a billion dollars is chump change in return for what they can get with just a few "settlem

"Patents are supposed to be used by the people who invent things to get money from the people who use those inventions to make products"

Patents are "supposed" to be used for exactly what we the people decide they should be used for. They are an artificial temporary monopoly that WE citizens have agreed to allow (through our representatives) in exchange for the economic benefit that goes along with the monopoly. That benefit is a window of opportunity to recoup the investment in R&D used to create

I regret to inform you, PCeye, that you are in violation of patent 1,521,271 "Method for whining about the patent situation" which I filed on July 22, 1998. You have 30 minutes to cease and desist violating my intellectual property, or you may opt to negotiate a license for continuing using my method. You may contact me at frivilouspatents@fraudulent-ip-sharks.com

IP lawyers and tech executives worry that Intellectual Ventures is less interested in changing the world with big ideas, and more focused on becoming an über patent troll, wreaking litigation havoc across industries with its patents.

Perhaps now it will finally compell change to the (broken) patent system.

Perhaps now it will finally compell change to the (broken) patent system.

The patent system will be fixed about the time the copyright system is fixed. That time is never.

The RIAA, MPAA, and Disney buy votes for their latest bill at the same time the large patent holders are "donating" money to those congressional members. The only difference is that right now, the copyright/drm lobby is using Benjamins and the patent lobby is using Jacksons.

That was my first thought, I really don't know if that's what will happen but you just hope the most obscene abuses will bring about reform.

On the other hand, if that's their business model, then they're probably better off keeping as much of it as possible off the radar, ensuring their royalty rates are not excessive, and limiting charges to the most established players.

MIT's Technology Review (a wonderful magazine - on par with Scientific American) has covered Dr. Nathan substantially with his [current] underlying philosophy and what he's going to do (mine patents) now that he's got his JD, focusing upon patent law.

The cover (May '04?) has a quote to the effect, "You can't outdevelop Microsoft but you can outinvent them", leading into an article about his efforts.

Regardless of what one feels about this type of business model, at least he's being open about it.

"Patent infringement" will be ignored because everyone owns a piece of each patent.

If by "everyone" you mean "established monopolies"... Say Apple and Microsoft agree to play together. With their pooled resource they have "a system of libraries for a graphical user interface that allows other applications to run" patented. Who is going to be able to challenge them in their markets? Or what if GSK patents "a system for cloning brain cells", even though they don't have the technology or products develope

That's really only relevant if the company in question is only doing business in the EU. Look at the recent case of RIM (Research In Motion), they were perfectly legit in their home country of Canada but ran afoul of an American patent troll and have suffered for it.

Although the European Patent Convention forbids the patenting of software, individual EU member states have varying laws on the matter. In the UK, software has already been quite patentable for a while.:/

A company of this size and portfolia could litaerally drag the entire economy to a standstill if allowed to patent everything.
It's one thing to have a whole bunch of different companies pushing competing patents, but when several large (and supposedly competing?) firms get together and pool their patents into one collossus, then you can be certain noone else will be allowed to enter any market remotly connected.
This is not a good thing.

On the contrary; maybe having the economy dragged to a standstill is the only way to let the politicians realize the folly of the 'everything's patentable' world. If it would lead to change, the temporary stagnation might be worth it.

On the contrary; maybe having the economy dragged to a standstill is the only way to let the politicians realize the folly of the 'everything's patentable' world. If it would lead to change, the temporary stagnation might be worth it.

Just like skyrocketting oil prices have convinced politicians on the need for alternative energy sources. Sure an economic standstill works, but it's horribly painful for everybody (except for those who are profiting short-term).What is really needed is an education effort on IP reform. Not just for the politicians, but for the public at large, so they can elect forward thinking leaders.

Just like skyrocketting oil prices have convinced politicians on the need for alternative energy sources.

I can't tell if you're being sarcastic, but if you are, there's a big difference. There is to my knowledge no legal barrier to alternative energy sources, it's just a difficult problem to solve. The lack of real progress here has been the lack of a push and the financial investment required to make developments, as well as an apparently deep-seeted need to try to one-up your neighbor in terms of the size

There is to my knowledge no legal barrier to alternative energy sources, it's just a difficult problem to solve

EPA regulations, tax breaks, import tariffs, energy policy, research funding, foreign policy, etc. are all ways the politicians have their hand in "encouraging" whatever they think is best.

At the same time, the patent problem is a legal problem by definition, and thus MUST be solved by politicians. There's also I think no social inertia to overcome to solve this problem. The average joe doesn't

On the contrary; maybe having the economy dragged to a standstill is the only way to let the politicians realize the folly of the 'everything's patentable' world. If it would lead to change, the temporary stagnation might be worth it.

The way I see it, without this whole IP/patent business, the situation is as follows:

Cost of production in the US is far higher than anywhere else

With education improving around the world, the US is losing any advantages on that front it used to have

I'm waiting to recieve a patent on the auto patent generator. It is based on the old elisa code. It churns out randome patents that sound pretty good. At least good enough to get past the patent geeks who seem to approve just about everything. So far 1.5 million patents have been generated and submitted. Now it's time to sit back and wait for all of them to be approved.

Think it. They are going to flood the courts with litigation on every infringment on their patents. This could lead to massive reform in the patent arena. Things could get horrible, then correct itself. Maybe.

Then again, Congress is thinking of passing a stronger version of the DMCA [com.com] and I have seen Unions (in Europe) eventually chase their employers away as demands got more and more ridiculous (

The idea of a self-correcting mechanism is nice, and would indicate their is some sanity left in our government, but somehow I doubt that. It's sad that we have to depend on Corporations will get sick of other corporations doing this and will bring a correction to things - that's not how our government ought to be. Fo

Last January a dozen of the world's most respected scientists gathered in a nondescript conference room at an office building outside of Seattle. They sat around a table cluttered with laptops and papers, snacked on bowls of beef jerky and Chex Mix

Imagine in 10-20 years, China becomes the biggest economy in the world, it ignores all the US patents, and just use those patents to roll out their own products.

For example, a patented medicine sold by an US company to Africa at $10 per bill, and the same "Made-In-China" pill cost $0.01, what is to stop Africa from buying from China instead?

Right now US is still powerful enough so that other countries must agree to certain rules/laws made in USA, in exchange for free trade deals, but when that strength faded, so will the leverage.

I draw this opinion from the recent, possible change of international whaling law, where Japan is about to gather enough votes to start commercial whaling again. So what is deemed illegal in the last few decades will soon become acceptable when the power shifted.

You need to respect US patents if you intend to sell in the US. I suspect that this is going to start really hurting the US in the next few years. What do you think will happen when, for example, an EU or Asian software company gets hit with a software patent suit? If the US is not their principle market, then they will just pull out - sell their products everywhere except the US. Other companies might decide that selling in the US is too risky, and also ignore the US market.

Since software is often not a real product (it's a tool that is used to make other products), this could have a serious effect on the US economy. In the worst case, this would start happening to Free Software - it would be free-beer for any non-US company to use, but cost money for the patent license in the USA.

Not very fsking likely, the US is the biggest market in the world for Asian products. Just look at the Trade Deficeit.If everyone cross licenses patents, then this isn't an issue anyway. Depending on the $$ in the market they may be giving up too much, then they just pay the patent fee. Open source software is a possible solution to the issue but thats not immune from silly-ass lawsuits (see SCO vs IBM). Besides in the USA, software is only copyrighted not patented (yet).

You need to respect US patents if you intend to sell in the US. I suspect that this is going to start really hurting the US in the next few years. What do you think will happen when, for example, an EU or Asian software company gets hit with a software patent suit? If the US is not their principle market, then they will just pull out - sell their products everywhere except the US. Other companies might decide that selling in the US is too risky, and also ignore the US market.

If the US is not their principle market, then they will just pull out - sell their products everywhere except the US.

To all the naysayers, this already happens. A company I worked for in the mid-90's decided to stay out of the US market and concentrate on China instead after receiving a threat of a patent lawsuit from one of our competitors. The idea was obvious, and we'd actually implemented it before the US based patent holder, but it wasn't worth fighting it.

I've read that the US didn't initially respect foreign patents or copyrights at all, but a quick google search turned up nothing. Oddly enough, none of the histories of IP, patent, or copyright I just read mentioned anything about the US's wholesale 'theft' of IP. Wonder why?

However, American publishers continued to regard the work of a foreign (i. e., non-resident) author as unprotected 'common' property. Thus, although the Berne Convention greatly simplified the copyright process among European nations, numerous unauthorized American re-prints continued to appear until 1891, when the United States finally agreed to discontinue sanctioning literary piracy. In 1896 the American Congress joined the international copyright union, after petitions directed at it by such noted Brit

With the sheer volume of patents they hold, the smart move would be to avoid garnering too much attention from Congress and instead sell advantage to competing companies. In other words, their primary source of income wouldn't come from pure patent protection litigation, it would come from companies paying them to tie up their competitors' product lines with injunctions and patent violation suits. The 800 lbs. gorilla would get richer as a hitman than as a tyrant.

Nathan Myhrvold is not a nobody. He has a rich history all saved on google. A little bit of research should show you whether is a nice guy who is trying to make the world a better place or an evil son of a bitch or somewhere in between.

Anybody who has been throught the early years of Microsoft's war on the IT industry knows what kind of a person he is. Suffice it to say he is not a nice guy trying to make the world a better place.

Right now, large companies amass huge throw weights of patents. In general, the outcome of a patent war is Mutually Assured Destruction, so they also enter into mutual cross-licensing agreements that in effect create a patent-free zone for the Fortune 500.

What Intellectual Ventures could do is create a patent pool for the present members of the club.

It works like this: Microsoft transfers its patent portfolio to IV in return for a license to IV's patent portfolio. This is no loss to MS because they've already cross-licensed everything with Philips, Cisco, etc. -- all of whom do the same. From the POV of club members, nothing changes, except perhaps that they spend much less money negotiating cross-licensing agreements and pay a bit to IV for the convenience.

On the other hand, now IV has practically all of that throw weight. Anyone not an "Executive Member" of the club will have to pay (dearly!) to use any of the IV portfolio. What's more, Mutually Assured Destruction doesn't work because IV doesn't actually do anything -- they can't be sued for infringing patents when they don't make anything.

The upside to the club (aside from convenience noted above) is that any of the "little people" who get uppity are now facing the combined throw weight of all of the patents in the world -- and the club members don't have to accept the public-relations liabilities.

It's a total win-win situation. For instance, if done right Microsoft could keep Linux tied up in court forever without ever themselves taking a PR hit. Sort of like the BSA except for suppressing potential competition instead of keeping customers in line.

You make an interesting argument, but I don't know if I fully agree. Let's say Microsoft wants to keep Linux buried in litigation through this organization. Well, the problem is that it has other members with very likely competing interests. For example, Nokia might not like seeing its patent troll baby being used to quash one of its own business partners [slashdot.org]. So what happens when this sort of conflict of interest arises? And it will.

I find it hard to believe this troll group will be used for the evil people seem to be claiming. More likely, it will be used as a massive reserve for defensive patents. Much like a defensive alliance between nations, you won't see members picking fights and suing people actively, but instead the group exists to allow for a collective means to *defend* from REAL patent trolls.

Making money off patents casts you as a pariah in the business community. I think this company will be mainly used for defensive purposes. There are just too many legitimate ways for these companies to make money.

Back in January, Red Hat reversed a longstanding policy and allowed the Mono.NET implementation into the Fedora distribution. A set of Mono applications (Tomboy, Banshee, F-spot) also went in at that time. The move was generally welcomed, but a number of observers wondered what had changed to make the addition of Mono possible. The sticking point had been a set of patents on.NET held by Microsoft; presumably those patents were no longer seen as a threat. But no information on why that might be was released at that time.

We missed it at the time, but Fedora hacker Greg DeKoenigsberg posted an explanation in late March. The answer, as it turns out, may offer some clues of how the software patent battle might play out.

Back in November, the Open Invention Network (OIN) announced its existence. OIN is a corporation which has been set up for one express purpose: to acquire patents and use them to promote and defend free software. The OIN patent policy is this:

Patents owned by Open Invention Network will be available on a royalty-free basis to any company, institution or individual that agrees not to assert its patents against the Linux operating system or certain Linux-related applications.

The list of "certain Linux-related applications" is said to exist, though it has not, yet, been posted publicly. But Mono is apparently on that list. So anybody who files patent infringement suits against Mono users, and who is, in turn, making use of technology covered by OIN's patents is setting himself up for a countersuit. Depending on the value of the patents held by OIN, that threat could raise the risk of attacking Mono considerably.

If this firm attacked Linux, say, what is to stop someone with a big patent portfolio (like IBM) from attacking individual members - even all of them - who subscribe to this cartel? Members could get pulled into patent disputes through the actions of their fellow members. They had better stick to defence, not offence. They might shoot themselves in the foot.

Or, to look at it another way, Eolas made more than that from a single patent. So did NTP, for that matter[1].

Looking at it that way, if even two out of their 5,000 patents turn out to be of similar 'quality' then their investors could be looking at a 100% return. If it weren't for the fact that I really don't want to encourage this kind of behaviour, I would be looking at buying shares...

[1] Technically, NTP had either more or fewer than one patent, and it's still not quite clear which.

No matter what the Intellectual Property industry would have you believe, trademarks, patents, and copyright aren't the same thing.

That "TM" on the end there means that they consider it to be their trademark. It doesn't hold any legal weight. If they had a registered trademark, that would be an ®, it would have legal weight, and it still wouldn't be a patent.

Perhaps you were trying to be funny, but mis-information isn't humorous.

"TM" carries some legal weight, in that they are putting the world on notice that they claim that to be a trademark. To qualify for registration something has to be used in interstate commerce and meet other requirements as well, which they might not have yet done. Almost every registered mark is first used prior to registration. Once it's used, you can then register it.

When you lose a trademark infringement suit, you have to stop using the mark. When you lose a patent suit you have to pay. Also, you can use the same mark as somebody else as long as you're using it for something different.

You don't need a reason to file a civil lawsuit, so that's a pretty dumb point.

We've already seen patent holding companies suing the pants (and shirts and ties & everything else) out of other companies for patent infringement. What's to stop this one. I understand the idea of a company whose only revenue is from patent litigation or royalties, but still! Most companies make money by providing goods and services. This does neither and should be considered nothing more than a parasite.

Create an open source patent organization and start applying for software patents on behalf of open source coders for every little piece of innovation. The idea is to keep the threshold of what qualifies as innovation low to generate a huge list of patent applications.

The patent office is well built to resist denial of service attacks like that - it costs a shitload of money to apply for a patent. That does mean that few "small inventors" can ever afford a patent, but it prevents it from getting "bogged down" at least.

For paying the patent application fee, that is. Assuming you qualify as a small entity (guessing thats pretty easy if you're an open source project with genuinely independent developers, as opposed to the typical major open source project with most of the heavy lifting being done by folks who are paid by IBM et al to do it), thats $75 for each DDOS patent that you file [uspto.gov]. I think you'll break your bank account before you break the "server"'s capacity.

Alright patent bashing aside...As I understand IV from some people working with them (with the caveat that my understanding is not based on a direct relationship with them, but lunch conversations/rumor):

1) The $400M is NOT an investment. It is blackmail, like protection money. Company X pays IV for the costs of a patent portfolio with the understanding that IV will not sue Company X based on those patents (i.e. they get a license). So, Company X pays protection money to IV and IV gets new patents paid for to go sue others on.

2) There is no "speculation" that IV is a troll. As I understand it, that is their purpose.

3) IV doesn't invent anything. They buy blocks of patents on the cheap (especially if they get other firms to pay) from some other company's firesale. Usually these patents are an unusable mess and require massive clean-up. But, if you buy thousands of patents you'll hit gold eventually.

4) As a troll, if you don't have deep pockets, IV doesn't care about you (unless you have something to sell). This is cincontrast with real companies that often use their patents to prevent a second company from making a product. IV just wants money.

The US Constitution recognized only individuals with respect to copyrights, patents, etc.. At the point where corporations were given equal status with individuals then all of the rights that had been held by individuals then became rights that corporations could also hold. Corporations can, with this accession, do things that no individual could possibly do. Therein lies many a disaster, many of which lie immediately ahead in the future. Every time a corporation petitions a legislator for a law that gives it more power, the rights of the individuals are the currency paid in this transaction. The eventual outcome of this, it should be clear to all by now, is that a few corporations will hold all the power and no individuals will have any rights except those that the corporations see fit to allow them to have to the extent that it fulfils the plan of the corporations to manipulate the people. As Ralph Nader has often explained, unless and until we people put an end to this individuals will find themselves with fewer and fewer rights, and corporations will grab more and more power over individuals. This is a war, folks. If you don't think so you are condemning your progeny to virtual slavery.

I agree with you... up until you started to bring up Ralph Nader. Ralph, unintentionally of course, is one of the biggest allies of the big corporations... by promoting expensive regulation that makes doing buisness unaffordable for anyone by huge corporations who can afford the initial capital investment to comply with regulations. Also, in his dream world, most of the economy and society would be controlled by the government (which is as bad or worse than having a few corporations control everything). Rem

I concur. Individuals can be responsible and have a sense of ethics. Corporations are by definition non-ethical because profit is all they care about, and have no sense of social or personal responsibility. They shouldn't have the same rights as individuals if they cannot express the same social responsibility.

Surely they're not going to sue their investors, mainly big businesses. It seems that the 'patent trolls' are using small companies who like to sue big businesses. I wouldn't be surprised if this company was formed as a defense against patent trolls, rather than as an übertroll.

Basically, his rationale is that because companies don't permit engineers to check patent portfolios and many companies don't actively check patents against their own products a lot of companies are in trouble.

Personally, though I'm not quite convinced. I believe it is a way to squeeze out the small players in the market. There's something about this guy that after seeing the video demonstrates one thing: not trustworthy. His body language and voice show through right away.

I wonder how much it costs to join the "club" and I wonder what kind of contract you have to sign to get in.

If you are technically smart and invent something but you try to create a patent your self for low cost you are likely to be screwed by lack of knowledge of legal drafting. So you have high upfront cost to pay for that language or figure it out yourself.

If you are an IP lawyer with not much technical skill, its ok if your idea isnt really new. It does not cost you much to submit more than one application, and the wording on some makes it new. But that is determined later. You have low upfront cost.

Imagine that Intel, AMD and IBM not only patented everything imaginable in the uProcessor space, but that they got together and cross-licensed all that tech.

On the face of it, this sounds advantageous. It allows more cool features in processors and alleviates those three companies from having to worry about getting involved in frivolous lawsuits with their main competitors.

Now perhaps Intel patented the XOR operation. Sure the patent is blatantly unfair, but since IBM and AMD can already use it then they have no need to fight intel's patent. THe only person who would want to fight it would be some new player in that space, but who'd have the resources?

If large corporations start broadly cross-licensing technologies then it'll effectively kill the little guy and sew up the market.

They've been cross-licensing their patent portfolios for decades. That's nothing new. What is new is that somebody is buying up patents by the shitload, with intentions that are murky at best. Even if their intentions are honorable now, who's to say they always will be? This much power in so few hands is a risky proposition and just asking for trouble. Hell, if I were out to really screw up the American industrial base, using our own legal system against us, this is exactly how I'd go about doing it.

Back in the late 80's, I was contacted by the lawyers for Commodore Computer. They were looking for potential witnesses in a lawsuit someone had brought against the company. It seems someone had patented the XOR instruction as it was applied to on screen graphics, and claimed that an enhanced BASIC program for the C-64 violated that patent. At the time, I was a C-64 software developer with some friends in West Chester (C='s HQ).I was never called, more's the pity since it would have involved a trip to San F

The problem with prior art is that a patent troll can doctor it up in BS and try to patent it anyhow. It will probably slip past the patent office. It's true that it won't hold up in court, but for a small business looking at a multi-million dollar fight to defeat a troll's portfolio of prior art, it effectively eliminates competition.

Do you have to spoil the child? Beat it? Ignore it? Lead by example? What circumstances can create a creature so base as a patent troll? To they have even a shread of scruple left?

Actually just give it everything it wants, its ego will grow exponentially larger. If they had any discipline they may have realized that there actions will have reactions that may have negative circumstances.

The patent system will not be changed until it wreaks havoc across the land. It will be a painful process, but isn't change always such?

The only problem is that - when the dust finally clears and we awaken to sanity - the rest of the world will have sped far ahead. We've already lost our technological edge; to see this one must merely glance at our international partners. Broadband speeds orders of magnitude faster than our typical domestic cable/dsl, for a fraction of our cost. A growing trade deficit